CALGARY, ALBERTA--(Marketwired - Dec. 22, 2015) -
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
DIVERGENT Energy Services Corp. ("Divergent" or the "Corporation") (TSX VENTURE:DVG) today announces that, subject to the final approval of the TSX Venture Exchange (the "TSXV"), and pursuant to the terms of the debenture indenture (the "Indenture"), as amended, it has amended the terms of its previously issued 10% secured, subordinated debentures (the "Debentures"). The terms of the Debentures were amended to (i) extend the maturity date of the Debentures to December 31, 2017; (ii) provide Divergent with the ability, at its discretion, to pay any interest obligation that becomes due by the issuing of common shares of the Corporation (the "Common Shares"); (iii) allow for the partial redemption of the outstanding Debentures at the discretion of the Corporation; and (iv) remove all references in the Indenture to CDN Oilfield Technologies & Solutions S. de R.L. de CV, a direct, wholly-owned subsidiary of the Corporation ("CDN Mexico") as a Guarantor and removing any reference to any security interest over CDN Mexico's present and after-acquired real and personal property (collectively, the "Amendments").
The Amendments were approved by an extraordinary resolution of the holders of the Debentures (the "Debentureholders") effective December 18, 2015 and Divergent will enter into a supplemental indenture with Computershare Trust Company of Canada, as Debenture trustee, to reflect the Amendments.
Pursuant to its right referenced above, the Corporation has elected to satisfy an interest obligation in the amount of $144,932 due on December 31, 2015 (the "Interest Obligation") by the issue of 579,728 Common Shares at a deemed price of $0.25 per Common Share to the Debentureholders. Of the Common Shares which will be issued to satisfy the Interest Obligation, 13,108 Common Shares will be issued to Directors and/or Officers of the Corporation.
In consideration for the Debentureholders approving the Amendments, the Corporation has agreed, subject to the final approval of the TSXV, to issue to each Debentureholder an additional 500 common share purchase warrants for each $1,000 principal amount of Debentures held by such Debentureholder ("Additional Warrants"), for an aggregate of 2,875,000 Additional Warrants. Each Additional Warrant entitles the holder thereof to purchase one common share in the capital of the Corporation at an exercise price of $0.24 on or before December 31, 2017. Of the Additional Warrants being issued, 65,000 Additional Warrants will be issued to Directors and/or Officers of the Corporation.
Securing the Amendments provides Divergent with enhanced financial flexibility as the Corporation continues to advance development of its revolutionary Linear Electric Submersible Pump (the "Linear Pump"). The first of these Linear Pumps is expected to be installed in a well in Southeast Saskatchewan by one of Divergent's oil and gas producer clients early in 2016, following the resumption of full operations after the holiday season. Divergent is in discussions with other oil and gas operators regarding additional installations at sites in Canada and the United States, which would be anticipated following the successful deployment of this Linear Pump in Saskatchewan.
The Corporation's Wyoming-based Electric Submersible Pump ("ESP") operation continues to exceed expectations and internal estimates, with activity levels reaching a five-year high during fourth quarter 2015. This growth is a clear demonstration of Divergent's ability to exceed client expectations for its products and services, with continued market expansion anticipated as industry activity increases within the Powder River Basin.
ABOUT THE PUMP AND DIVERGENT'S TECHNOLOGY
The permanent magnet motor technology that Divergent is advancing in its Linear Pump has the effect of duplicating rod pump movement without the rod strings or surface lifting equipment typically used in traditional oil pumpjacks by generating thrust from a magnetic field and magnets placed on the shaft of the motor. Since all moving parts are contained within the submersible housing, Divergent's Linear Pump eliminates rod and tubing wear, making the Linear Pump ideally suited for precise placement within bent or curved wellbores, including horizontal oil wells.
ABOUT DIVERGENT ENERGY SERVICES CORP.
Headquartered in Calgary, Alberta, DIVERGENT Energy Services Corp. provides an array of artificial lift products and services that are used in the oil and gas industry, including its revolutionary Linear Electric Submersible Pump. Divergent's Linear Pump is approaching commercialization and is targeted to replace traditional oil pumpjacks. Other Divergent products currently in use by its oil and gas industry customers include Electric Submersible Pumps and Electric Submersible Progressing Cavity Pumps.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, including, without limitation, statements pertaining to the receipt of TSXV approval and operational updates. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in the Corporation's disclosure documents on the SEDAR website at www.sedar.com. Forward-looking statements are based on estimates and opinions of management of the Corporation at the time the information is presented. The Corporation may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but the Corporation undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.